SES China: Who’s got the Juice?

Posted by Miles Evans

Some of the English to Chinese translations didn’t come out perfect, but considering the extreme differences between the two languages you couldn’t not be impressed with the effort. I wish I could have met some of the people actually doing this work. Hopefully the upcoming show in Tokyo takes note from Chinese ingenuity and does a bilingual session – word on the street is this won’t be the case for the upcoming show in April, so I highly doubt I will be making the trip.

Alright so instead of covering some of the rudimentary SEO principles (the fundamental sessions were packed btw) that have been covered to death here and other places, I did my best to focus on some of the specific Chinese based usage statistics that all of us in the region were so hungry to learn about. Specifically the differences between traditional and portal based search.

Translating my scrawl and some of the video I shot took me some time to go through and on top of this my brand new Dell notebook died on the train to Nanjing. Instead of going over each speaker in detail I will summarize what I picked up from each of them and others I hounded during the breaks (sorry guys).

The following data comes courtesy of several search marketing research groups based in China – I believe it is current to early 2006:

• China has 100 million people using the internet on a regular basis.
• The vast majority (85%) of the 100 million are using search (both portal based and traditional).
• 65% of these users are under the age of 30.
• Baidu maintains an impressive 54% market share with most of the remaining searchers using Google. This is up quite a bit from 2005 (see below).
• Higher income searchers are using Google much more than Baidu as well as students and other savvy Chinese surfers.
• The remainder of the market is owned by Yahoo, MSN, Sogou, Zhongsou, and a plethora of other regional players. I wish I had some better figures on these guys.

In retrospect here is market share for traditional search in China for 2nd quarter 2005:

• Baidu 37%
• Google 23%
• Yahoo (including 3721) 21% respectively
• Others such as Sogou 13% (Data source: Analysis International's Search Engine Focus Report 2005)

Keep in mind the figures mentioned above are specific to traditional western style search ala Google and Baidu. As Jack Ma mentioned during his keynote, satisfaction rates are still lower with traditional search vs portal based stuff but obviously this is changing faster than I can suck down a plate of Peking duck. Young people and early adopters are forging this trend. It was kind of difficult to determine what the market share is between the two flavors but one gets the impression that the big Chinese seizure inducing portals are quickly losing ground.

Another point made I found quite interesting was that Chinese searchers are impatient – almost never going past the first page of results with traditional search. Standard search in the west on the other hand finds people clicking through to the 3rd or even the 4th page, with quite higher conversions being realized on these clickers. I am not sure how this type of thing will be addressed but it lends credence to the fact that these big portals will never be out of the picture. In fact with some of the cool stuff going on with customizing search based on user habits and all sorts of related kung fu, it’s anyone’s guess how this will play out.

The fact remains that traditional vs portal based search was a key theme throughout the event and I think it will be really interesting how the game filters out.

Some of the old guard in China’s portal based search include: sohu.com, sina.com, netease (163.com), 3721.com, 58.com, tom.com, and many others.

So what kind of scratch are these guys fighting it out for? Here are some recent numbers on China’s online advert potential again from http://analysis.com.cn:

China online advertising market reached RMB 939 million in the fourth quarter of 2005 and forecasts the compound annual growth rate (CAGR) of China's online advertising market will reach over 30% in the coming three years. Keyword advertising reached RMB 218 million, online Ads reached RMB 646 million, PR advertising reached RMB 76 million and Email advertising reached RMB 5 million.

For some more in depth statistics and other great coverage of SES China check out my pal Marc Macalua’s data on seoroundtable.

Oh and yeah for those who don’t know (I didn’t):

China Population
1900: 500,000,000
1950: 562,580,000
2000: 1,268,853,000
2006: 1,313,974,000 <-- ummm, wow.
Per Capita Income (2004) - 1,059 Euro / 1,290 US Dollars per year

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Posted March 19, 2006 04:30 AM | Permalink | Trackback URL | DIGG!